Gold 1773,185
|
EURUSD 1,2018
|
DJIA 33876,50
|
OIL.WTI 63,285
|
DAX 15151
|
---|
We have previously drawn the attention of our subscribers to the following fact. At the beginning of this year a large number of experts were expecting strong movements of the Euro/Dollar pair. The optimists saw the level of 1.30. The pessimists thought that the first target would be reached at 1.10, and the second one would be the parity level.
EURUSD
Our view is that it could be exactly the opposite. The EUR/USD will not show strong movements and will move in a low corridor throughout the year.
Yes, fundamentally the USD should rise against the EURO. The reasons are threefold. On the one hand the US economy is recovering faster than the European economy. On the other hand the pandemic in the US will also end earlier. The third reason is the big difference in yields between U.S. and Eurozone bonds.
However, all of this is overshadowed by the fact that the US government continues to print huge amounts of money. Yes, central banks all over the world are printing it, but not as much as Americans.
As a result the Euro/Dollar pair simply can’t go far in one or the other direction. Right now, judging by Friday’s red candlestick, the upward movement is fading. You might expect a sideways move or a drop below 1.20.
The optimal solution for the rest of the year might be to trade in a corridor. We buy on the lows and sell on the highs. However, we also need to consider swaps. If we enter trades with small orders + averaging, the more correct strategy looks like this. Only selling the EUR/USD pair and waiting for a few figures to make a profit.
08.00 German retail sales for March
16.00 ISM Manufacturing Index for April in the US
20.20 J. Powell (Fed) speech
Important Notes on This Publication:
The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.